Demand Side Factors and India s Industrial Growth

Pradip Maiti R Kavita Rao Using a dual economy framework, wherein the industrial sector is postulated to face an effective demand problem, the paper proposes to explore the extent to which demand side factors served as a constraint to growth of the Indian industrial sector, over the period of 1960-61 to 1989-90. The main factors considered are growth of agricultural output and of autonomous expenditure as indicators of demand side factors. We have also sought to explore the possibility of changes in the nature of the underlying relationships by using dummies, to demarcate the different sub-periods.